Finance bosses optimistic about Labour plans to cut red tape
Finance bosses are optimistic about Labour’s plans to cut regulation across the sector, according to a survey, with more than half saying they plan to hire faster in 2025.
Polling by consultancy KPMG found seven in 10 financial services bosses think the policies will help attract foreign investment into the sector.
Meanwhile, 55 per cent of them said they plan to increase hiring in 2025, while 17 per cent said they are planning a “significant” recruitment drive, the research found.
Chancellor Rachel Reeves pledged in November to rip up financial red tape.
She said in a Mansion House speech that regulatory changes after the 2008 economic crash have “gone too far”.
KPMG’s head of financial services, Karim Haji, said the optimism is “encouraging”.
But he said “concerns” remain around the impact of the Budget on the sector.
The respondents with less confidence in the Chancellor’s plans pointed to increased tax for businesses outlined in the spending statement.
In October, Ms Reeves raised the amount employers must pay on national insurance contributions (NICs), while also raising the minimum wage.
The policies are designed to pay for better public services such as transport and the NHS, but have attracted criticism from some sectors for making it more expensive to hire people.
Mr Haji added that finance bosses would want “more details on the Government’s competitiveness strategy to really understand how the Chancellor is proposing to work with them” in 2025.
Nonetheless, more respondents to the survey are confident their firms will be profitable in 2025 than at the same point last year.
Some 94 per cent said they think they will turn a profit in the first quarter, up 11 percentage points from 83 per cent in the first quarter of 2024.
Among bosses’ main concerns are the ongoing effects of inflation and subsequent high interest rates, which are set by the Bank of England.
Meanwhile, geopolitical risks were cited by the fewest leaders as the top challenges heading into 2025.
Firms said junior and middle management roles will attract the most hiring, followed by apprentices.
Almost a third said whether they can attract qualified candidates would be a major factor in hiring, followed by about a quarter citing increased NICs.
Mr Haji continued: “2024 has been a challenging year with financial services firms facing the headwinds of higher interest rates, inflation and geopolitical uncertainty.
“However, the sector goes into the new year with optimism about growth and profitability, coupled with strong intentions around hiring.”
Press Association